Posted by, Neil Shillito

The whole point of a business plan is to present your proposed business in the most attractive light to whoever reads it. Good financial advice is therefore vital, since you do not want to give anyone a reason to dismiss it out of hand.

A business plan is a vital document that sets out the scope of your proposed business, how you intend to approach key areas of its operation and, arguably most importantly, information about its profitability over time. For this reason, consultation with a financial adviser is critical, since you will need to consider various eventualities concerning your business, your assets and the effects of success or failure on you personally.

The components of a business plan

There are several sections you should include in your business plan. You need to describe the opportunity that you hope your business will be able to profit from. You will need to list the facilities you need to achieve this – buildings and services, equipment such as computers, machinery and so on. You need to think about your marketing, and the problems posed by competitors already operating in this area. And, of course, you need to think about what each of these things means in terms of money. This is where financial advice becomes so important.

Financial advice for budget and projections

If you need some guidance on the contents of your business plan, you can find plenty of help online (the government’s Business Link website has templates to download, as well as other information – see http://www.businesslink.gov.uk). The section of your plan that relates to money should be approached particularly carefully, since this is the part which investors will scrutinise most thoroughly. If your business requires any level of funding then you should speak to an accountant or financial adviser to discuss what this could mean for you.

The section dealing with projections has great significance when it comes to accessing funds to get your business off the ground, usually requiring some degree of financial advice. It has to be as detailed and accurate as possible – whilst, at the same time, remaining as succinct as you can make it. You need to think about the investment you will have to make to start the business, early profit/loss forecasts, and a risk assessment that addresses the implications of various circumstances (unforeseen competition, supply problems, market changes) that could undermine your odds of success. If you need to take out a loan to satisfy your capital requirements, your financial adviser will be able to discuss collateral with you, as well as advising you on how you will be able to pay it back.

The probability of you securing funding from one source or another relies heavily on the ability of this section to convince potential investors. This is why financial advice should be sought: this part of your business plan has to be watertight if you are going to convince others to part with their money.

The executive summary

The executive summary, which will introduce the business plan, is the most key section. Its purpose is to give an overview of everything else in the document, in order to provide an at-a-glance version for potential backers and other interested parties to access quickly. This is the part you need to spend most time over, since it is all that many people will read. It has to be as concise as you can make it, but also as informative as possible. The summary should include the figures that you arrived at with your financial adviser, since these will be of most interest to investors. Make sure that your business plan as a whole, but particularly the summary, are well-crafted and thoroughly checked for spelling and grammatical errors, and are properly laid out. Clear headings and a sensible font size are key: you want this document to be as easy to read as possible, and to ensure that deficiencies of presentation do not put people off the substance of what’s inside.

Neil Shillito is co-founder and director of SG Wealth Management, a forward-thinking, FSA regulated company offering impartial, fee-based financial advicer Norwich and featured regularly on Asset.tv

Individual and Household Debt Survey of The US

Posted by Alex Leigh

UK guarantor loans provider, Guarantor Loans Company has just run a survey exclusively for How to Manage Money Tips on the subject of individual and household debt in the USA. Although the company’s main outlet is offering guarantor loans throughout the UK, they also run a Money Saving Blog and release regular survey results and insights across a range of credit markets.

As How to Manage Money Tips is a US based site, it seemed appropriate to run the survey for American consumers. We hope you find, as we did, that the results are quite intriguing. The characteristics of our respondents were as follows;

Gender
Male: 39%
Female: 61%

Education Level
High School Graduate: 4%
Some College, No Degree: 10%
Graduate Degree: 19%
Bachelors Degree: 57%
Associates Degree: 10%

Income Level
Less than $12,500: 5%
$12,500 – $24,999: 5%
$25,000 – $49,999: 29%
$50,000 – $74,999: 29%
$75,000+: 32%

It’s worth noting that our survey yielded no significant differences between education level and income level.

The Main Results

We aimed at getting respondents from across various states who would be able to provide a good cross section of society in general and posed numerous questions about debt and money management.

Our results showed that the average amount which people believed the credit card debt per household in the US to be was $7547, in fact the actual figure is $15,799^, so a little off but most people had a reasonable grasp of unsecured debt levels. Most respondents said that they had less household debt than they thought the average was; given that most people tend to underestimate the debt they have, this was anticipated.

9% said they were going to apply or considering applying for new credit in the next year. With 91% saying they would not; this enforces the position in the current economy where individuals are trying to reduce their debts at a time when economic growth is low.

We asked our respondents what they thought the best way to deal with debt is. The answers they gave with percentages are below;

Ignore It: 5%
Save Money and pay off Debts: 81%
Consolidation to More Affordable Credit: 10%
Other: 4%

We’re not entirely sure that ‘Ignore It’ is a great option going forward, but that it’s good to see that most people chose the sensible option of saving money and paying down their debt.

We also asked respondents for their own piece of advice on how to better manage your money. Here’s the top answers we received;

1) Don’t spend more than you earn
2) Save a set amount each month
3) Use credit cards, but pay them off each month. Use all the points you can earn
4) Always look to save money in every situation
5) Save, save, save!
6) Use cash, spend less
7) It’s never easy to work your way out of debt, it takes a lot of hard work and patience. Remember to think about that before you spend your money.
Ignore the idea of credit. Debt is not wealth. Invest in commodities and hard assets, not savings!
9) Save enough money for emergencies
10) With each paycheck you receive. Pay yourself first by putting 10% into a savings account.

I think there are some fantastic pieces of advice there. Each one has it own merits, but the overriding advice people gave was to not spend more money than you earn; quite a simple piece of advice, but not always easy to put into practice in today’s economy!

The last 2 questions we asked (as we were intrigued more than anything) was what colors they would each associate with debt and credit. We assumed the majority would favour Red for debt and Black for credit (which was correct) however, there were also some rather strange answers given;

Debt
Red: 90%
Yellow: 2%
Black: 8%

Credit
Green: 33%
Black: 19%
Blue: 14%
Brown: 4%
Orange: 4%
Red: 8%
White: 4%
Yellow: 8%

We’re not entirely sure why some of these colors make it here. Perhaps, the bank statements of those individuals use different color coding methods from convention?! Who knows… but it’s clear that debt’s color is red whilst the colour of credit is a little ambiguous. This may have been the way the question was asked – many people may have thought of credit as the same as debt, we actually meant it for meaning ‘being in credit’… oops.

We hope you’ve found these results interesting reading. If you’re interested in more results such as these, please visit the surveys and insights section at the Guarantor Loans Company website.

Alex is the Editor for The GLC Money Saving Blog. A blog ran by Guarantor Loans Company to help enhance the financial lives of consumers. He has an avid interest in all things financial, especially alternative financial products and debt solutions.

^Total revolving US debt ($793.1b May 2011) divided by estimated number of households carrying credit card debt (50.2m)
GLC Survey results collected 8th December 2011 – 9th December 2011 from GLC web survey panel of 75 respondents.

Save this Holiday while Avoiding Black Friday Crowds

Posted By Mary Ann Rosenthal

Black Friday may have some of the best shopping deals of the season, but the process of going out at midnight on the Friday after Thanksgiving, standing in line for hours, and competing against thousands of other shoppers all trying to score the same great deals is not for the faint of heart. And if you value your time as much as you value your money, you might decide that the time investment required for Black Friday shopping may negate any dollar savings you find.

But that doesn’t mean you need to spend hundreds more this holiday season. If you are a smart shopper you can get the same–if not better–deals as Black Friday shoppers, without all the hassle.

Look Online for Black Friday Deals

Many retailers have the same deals in-store on Black Friday as they do on their website. That means you can fire up your laptop from the comfort of home and browse retailer websites to see if their online deals match their offline ones.

Other retailers, those who have shelf space exclusively online, may also have Black Friday deals that you don’t see advertised in your local paper. Check all your favorite online retailers early on Black Friday and see what they’ve got to offer.

Check Out Cyber Monday

Like Black Friday, Cyber Monday is one of the biggest shopping days of the year. It occurs the Monday after Thanksgiving and is for online-only deals. When shopping online for Cyber Monday, or any other day, just remember to watch the shipping and handling charges of the items you buy. It’s not saving money if shipping and handling charges make up the difference between regular retail price and the sale price.

Buy “Un”-used

You can buy cheap, unused items from sellers on Craigslist and Ebay as well as yard sales, thrift stores and other locations. When shopping online, just be sure to specifically look in the item description for words like, “Factory sealed” or “Unopened” rather than just “Original packaging” as the latter could have been opened and used, then repackaged in the manufacturer’s box.

Get on the List

Many online and offline retailers have mailing lists that give subscribers access to exclusive sales and early notification of price reductions. Make sure you are added to the lists of any retailers you think might have deals that impact your holiday shopping list.

With a little planning and a lot of price watching, you can use the above tips and ensure that you get all the best sale prices this holiday season while avoiding the crowds.

BIO:
Mary Ann Rosenthal is a grandmother to four beautiful children under the age of five. She is dedicated to helping her friends and family save money and works with her son Aaron at www.CyberMondayDeals.com. She is also an artist, writer and aspiring photographer living in Saint Augustine, Florida.